Overview

This Finance Bill introduces various amendments to UK tax law, impacting income tax, corporation tax, capital gains tax, inheritance tax, the apprenticeship levy, VAT, and stamp duty. Key changes include adjustments to tax rates and allowances, the introduction of a new apprenticeship levy, and measures to counter tax avoidance and evasion.

Description

The bill makes numerous adjustments to the UK tax system. Significant income tax changes include the introduction of savings and dividend nil rates, impacting how savings and dividend income are taxed. The bill also modifies the tax treatment of employee share schemes, taxable benefits, and pensions, including a reduction in the standard lifetime allowance for pensions. Corporation tax is adjusted by lowering the main rate for 2020 and eliminating vaccine research relief. New rules around the taxation of profits from intellectual property and transactions in UK land are introduced to improve clarity and counter avoidance. Capital gains tax rates are reduced, with new rules on residential property gains and entrepreneurs’ relief. Inheritance tax changes concern an increased nil-rate band and the treatment of pension drawdown funds. A new apprenticeship levy is established, and further provisions include measures to tackle tax avoidance and evasion, both domestically and offshore.

Government Spending

The precise impact on government spending is not explicitly detailed in the bill. However, changes to tax rates and allowances, including the introduction of the apprenticeship levy, will likely affect government revenue and therefore spending. The reduction of some taxes could lead to reduced income for the government, whereas new levies and anti-avoidance measures could increase revenue.

Groups Affected

• Individuals: Changes to income tax rates and allowances, capital gains tax, and inheritance tax will affect individuals' tax liabilities. The apprenticeship levy will affect employers who pay wages.
• Companies: Changes to corporation tax rates, capital allowances, and transfer pricing rules, along with the new intellectual property rules and the apprenticeship levy, will affect companies' tax liabilities.
• Pensioners: The changes to pension rules and the lifetime allowance will impact pension benefits.
• Farmers: Changes to profit averaging rules will impact tax liabilities for farmers.
• Charities: The apprenticeship levy and gift aid provisions will affect charities.
• Banks: Changes relating to banking companies and restrictions on loss relief will impact banks.
• Oil and gas companies: Changes to supplementary charge and allowances will affect oil and gas companies.
• Individuals and Companies involved in offshore tax schemes: New penalties and increased enforcement measures targeting offshore tax evasion and non-compliance will directly impact these groups.
• Providers of electronic stored-value payment services and Business intermediaries: New data-gathering powers will impact these groups

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